Stimulus Checks And Inflation
And will washington s approach lead to devastating inflation and another economic crisis.
Stimulus checks and inflation. With the federal reserve and the federal government providing massive stimulus to the economy in the face of the covid 19 crisis a persistent worry among investors is whether these policies will lead to inflation down the road. The falling stock market decrease in spending i e. So back to the question will the 2 trillion covid 19 stimulus cause inflation.
At this stage even with the fed doing as much as it can it s still not leading to an enormous increase in demand olivier blanchard a senior fellow at the peterson institute for international. Slower velocity of money and the decrease in gdp due to closures are balanced against the inflationary forces of the stimulus. Once you receive your stimulus check you won t have to pay the money back.
Why it may be different this time. Stimulus checks for those earning more than 75 000 150 000 how it works u s. But you can t just pull 2 2 trillion out of thin air and give it out to people with no real consequences or owed debt.
Congress s unprecedented stimulus measures coupled with the federal reserve s aggressive efforts to shore up the economy could drive up inflation in the coming years leaving americans with less. Once the crisis is over how will all the. Where is all the stimulus cash coming from.